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US to discuss auto rules in NAFTA negotiations on Saturday: report

Trade representatives from the United States, Canada and Mexico met on Saturday and discussed stricter restrictions on automobile manufacturing as the U.S. pushes for updates to the North American Free Trade Agreement (NAFTA).

Reuters reported that U.S. negotiators are expected to introduce a proposal this week that would up the requirements on the content of automobiles required to be manufactured in North America for vehicles to qualify for tax free status under NAFTA.

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Canada's chief negotiator said that he wasn't expecting specific proposals from the U.S. during the Ottawa talks, which are due to last several more days.

“We’re not expecting that, no,” Steve Verheul told reporters on Saturday. U.S. chief negotiator John Melle told Reuters ahead of the talks that his team would introduce "challenging issues" during the Ottawa talks.

“With progress made in several issue areas in the first two NAFTA negotiation rounds, USTR looks to move forward with additional new text proposals in round three of the negotiations,” Melle told Reuters. “At this point in the negotiations, more challenging issues will start taking centre stage,” he added,

President Trump, who has repeatedly criticized NAFTA, has called for the rules of origin for autos to be increased, citing trade deficits of $64 billion with Mexico and $11 billion with Canada. A schedule obtained by Reuters indicated those rules would be discussed on Tuesday and Wednesday.

Last month, he against called NAFTA the "worst trade deal ever made" and threatened to exit the agreement.

“We are in the NAFTA (worst trade deal ever made) renegotiation process with Mexico & Canada.Both being very difficult,may have to terminate?” Trump wrote in August.

Mexico's foreign ministry responded to the comments at the time by threatening to exit the talks if Trump ended the trade deal.

"We don't believe it would be the correct route, or a viable route, to rescind the treaty just as we're in a process of renegotiation," Foreign Relations Secretary Luis Videgaray said in August.